Mumbai: Tata Power Co. Ltd on Thursday said its unit Tata Power Renewable Energy Ltd (TPREL) has won two solar projects of 50 megawatt (MW) capacity each in Karnataka under the Jawaharlal Nehru National Solar Mission (JNNSM) at a tariff of Rs.4.79 per kilowatt-hour (kWh).
The company has received a letter of intent to develop the two solar grid connected photovoltaic projects in Pavagada Solar Park in Tumkur district, Tata Power said in a BSE filing. The company will sell power from the projects to state-run NTPC Ltd’s unit NTPC Vidyut Vyapar Nigam Ltd under a 25-year power purchase agreement, it said.
The company is aiming to get more than its earlier stated 20-25% of total capacity from renewable energy, Mintreported in March, citing chief financial officer Ramesh Subramanyam.
Subramanyam said the company will not bid for solar projects at aggressive or low tariffs. Indian and foreign firms have been quoting tariffs below Rs.5 per kWh in government auctions to win solar projects in India, in part helped by lower cost of solar panels and government-provided solar parks.
In a reverse auction, the role of the buyer and seller is reversed and a business bid is won by quoting prices downwards. Solar tariffs first fell to a record low of Rs.4.63 per unit with SunEdison Inc.’s bid in November and fell to Rs.4.34 at a January e-auction conducted by NTPC. Indian banks are cautious about funding projects which offer low returns or look unviable, Mint reported on 15 April.
India launched the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010 with the aim of adding 20,000MW or 20 gigawatt (GW) of grid-connected solar power to India’s energy mix by 2022 in three phases. That target was raised to 100 GW by 2022 by the National Democratic Alliance government in 2015.
Under JNNSM, the government-provided solar parks offer project developers ready-to-use infrastructure, such as land and transmission facilities, leading to low project risk and lower costs.